Using the People Power of Platform Co-operatives

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Today, platform technology is being used to efficiently harvest massive amounts of wealth and data from communities and transport community capital and personal information to a small cadre of extremely wealthy tech billionaires. But it doesn’t have to be this way. Platform technology is being used to efficiently harvest massive amounts of wealth and data from communities and transport community capital and personal information to a small cadre of extremely wealthy tech billionaires. But it doesn’t have to be this way. Tech-focused platform co-operatives are a powerful option that could bring people together, implementing a principled approach to their development, use, and ownership as a revolutionary source for positive change.

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Platform technology is defined as a group of technologies that together form a foundation upon which other applications, processes, or technologies are developed or deployed to interact with the end-user. Platforms thus form the digital infrastructure upon which the public engages with the new economy, which is a profoundly digital economy.

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Platforms such as Amazon, Facebook, Uber, and Airbnb efficiently connect people and intermediate these relationships in ways that generate an abundance of transactions and information from which they profit, through advertisement, sale of user information, and user/transaction fees. These platforms now dominate our economies, and increasingly our politics. This dominance has accelerated in the world-shifting event that is the coronavirus pandemic. Like the railroad barons that cut across the great plains and through the forests of North America, platform barons are now paving digital networks through local economies. Increasingly, like the development of road networks, or electrical grids, in centuries past, digital platforms form the basic building blocks of the new economy in a hyper-digitized world.

 

But there is a key and vital difference between public utilities such as roads and digital platforms. That difference is that these platform technologies are not public and are a net drain on local communities. These platforms are owned by distant billionaires and are designed to incrementally drain local economies by diverting economic relationships online, charging fees or selling data that are directed to their foreign corporate offices and bank accounts, while contributing nothing in the way of taxes or public infrastructure to local communities in which they operate. Thus, in an ironic twist, despite widespread embrace by the public for the powerful efficiencies they create, platforms are often parasitic upon the public, scarring our communities in the medium-term.

 

People-centred Platform Co-operatives

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Platform technologies are digital infrastructure serving vital public functions in the new economy and therefore should be treated as public utilities. As vital public services, their ownership and benefit should be directed to the communities that use them and generate their success. The platform co-operative movement addresses the current inequities that platform technologies are contributing to and exacerbating in our troubled world.

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Platform co-operatives are businesses that fairly and democratically distribute ownership, governance, and profits between members who are the owners of the platform technology. This means that the benefit of the platform is directed to the people and communities that develop and use the platform technologies in ways that fit the needs and circumstances of the community of users. There are multiple ways a platform co-operative could be formed. Below are a few key approaches to forming co-operative enterprise:

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Producer Platform Co-op: A group of technology developers/producers forms a co-operative to deploy the technologies and services they produce to the public. The co-operative provides the opportunity for producers to vertically integrate by providing consolidated marketing, distribution, and administrative services for developer-owners. The co-operative purchases services and products from developers, and sells to the public. Profit is directed back to member-owners in proportion to how much of the services or product is purchased from each member.

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Consumer Platform Co-op: A group of consumers form a co-operative and collectively create and/or purchase platform technologies and services to provide themselves with the benefits of the platform technology. The co-operative is an operator of the platform technologies and services and may direct surplus revenue to the member-owners according to how much members use the platform.

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Multi-stakeholder Platform Co-op: Developers and consumers form a co-operative in which each stakeholder group owns a portion of the services and/or technology and governance of the co-operative. This model internalizes the Producer and consumer models, permitting the two or more member groups to integrate their commercial transactions and negotiate fair compromises as part of a united, democratic enterprise.

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A leading example

There are current examples of platform co-operatives contributing positively and powerfully to change in our communities. I had the opportunity to sit down for a coffee with the leader of one such platform co-operative recently. Patrick Nangle, CEO of Modo Co-operative shared with me his passion for sustainable social enterprise through platform co-operativism. Modo Co-operative is a consumer co-op, and North America’s oldest car-sharing co-operative. It has created and operates a platform that enables the sharing of vehicles. Established in Vancouver, BC, in 1997, Modo now has over 12,000 member-owners and a fleet of approximately 700 vehicles. Modo makes available its platform to other carsharing co-ops across Canada and to NFP operators in the USA.

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Modo’s success is underscored by its commitment to principled community service, as Mr. Nangle shared with me the Co-operative’s vision and purpose as including the generation of positive social and environmental impacts as integral to its business success. A significant part of this vision is how Modo facilitates more sustainable lifestyles for its members by filling the gap between vehicle ownership and other transportation modes. It co-operates with multiple other transportation modes, including bike share platforms and emerging public transportation partnerships. Modo’s commitment to the community and its members has led to a principled approach to the growth of the co-op and is a leading example of responsible corporate citizenship of platform co-operativism in the new economy.

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Our society is in the middle of a historic economic transition that is characterized by a shift from economic relationships being predominantly carried out in person, using public infrastructure and utilities, to an increasing dependence on digital platforms to carry out our economic relationships. Simultaneously, we are seeing a profound intensification of wealth inequality as capital accrues to digital platforms that profit exorbitantly through our increasing dependence upon them. This dilemma has created major instabilities and crises in our society. The co-operative movement seeks to address this crisis by growing new platform co-operatives through which the people that do the hard work of developing these technologies derive economic, social, and environmental benefits alongside the communities that use these technologies and rely on them to support their families and local economies.